AT A Tesco's supermarket in Cambridge, England, the shelves have begun to talk to their contents, and the contents are talking back. Soon, razors at a Wal-Mart store in Brockton, Massachusetts will begin to let staff know when they suspect theft. This spring, a group of firms will attempt to track, in real time, many thousands of goods as they travel from factory to supermarket shelf. Consultants tout cost savings and extra sales that could run into tens of billions of dollars a year.

The reason for the sudden buzz of excitement is a new, supercheap version of an old tracking technology called Radio Frequency Identification (RFID). RFID systems are made up of readers and “smart tags”—microchips attached to antennas. It is based on barcode labels which also cover relevant information about products saved in the system. When the tag nears a reader, it broadcasts the information contained in its chip. In the past four years, the cost of the cheapest tags has plunged, from $2 to 20 cents. In the next two to three years, prices are likely to fall to five cents or less. Already, RFID tags are made in their millions and used to track pets and livestock, parts in car factories and luggage at airports. Last month, Gillette announced that it had put in an order for half a billion smart tags, signaling the start of their adoption by the consumer-goods industry. If they catch on, smart tags will soon be made in their trillions and will replace the barcode labels on the packaging of almost everything that consumer-goods giants such as Procter & Gamble and Unilever make.

Although RFID is more advanced than barcode labels, it will not completely replace barcode labels in a short time. Because not all products are available to have RFID attached. For example, often relevant information about garments like item, size, color and place of origin need to be printed on hangtags. Barcode is undoubtedly printed onbarcode labels. Therefore, it takes some time to popularize RFID.